Genpact Ltd. Q4 FY2024 earnings call

• Q4 2024 showed better-than-expected performance with revenue up 9%, Datatech AI up 12%, and digital operations up 6%.
• In 2024, built a strong foundation with 14 large deals, 10% higher booking aggregate, revenue growth 6.5%, operating cash flow up 25%, adjusted diluted EPS up 10%.
• Announced general availability of first agentic solution for accounts payable, launched AI value studio and Genpact Limited GigaFactory.
• Partnerships saw 50% year-over-year growth in partner-related revenues, reaching high single digits of revenue by year-end.
• Focus on three plus one execution framework including partnerships, Datatech AI, simplification, and establishing Genpact as best credential for AI-led transformation.

In Q4 2024, revenue reached $1.25 billion, up 9% year over year. Datatech AI had revenue of $595 million, a 12% increase, contributing 48% of total quarterly revenue. Digital operations, making up 52% of total revenue, grew 6% to $654 million. For the full year 2024, net revenue grew 6.5% to $4.77 billion. Datatech and AI delivered revenue of $2.23 billion, a 6.9% increase, accounting for 47% of total revenue. Digital operations, representing 53% of revenue, expanded by 6.1% to $2.53 billion.

• Full-year 2025 revenue guidance at midpoint 6.5% as-reported, equating to ~7.2% in constant currency. Adjusted diluted EPS midpoint 9% growth.
• First quarter 2025 net revenue expected between $1.202 billion and $1.213 billion, growing 6.7% at midpoint.
• Full-year gross margin expected to expand to 36%, operating cash flow ~$590 million.
• Board approved 11% increase in regular quarterly dividend and $500 million increase in share repurchase authorization.

Actual results could differ materially due to important risks and uncertainties including those in Genpact's 10-K and 10-Q filings with the SEC, such as factors that could affect business outlook, strategies, and long-term goals.

Q: Puneet Jain asked about Data Tech AI and digital operations guidance, specifically on slowdown beyond Q1 and acceleration.

A: Mike Weiner and BK Kalra explained about annuitized vs non-annuitized business, tough comps in later years, and Gen AI contracts driving follow-on work.

Q: Maggie Nolan inquired about hiring pace for Agentix Solutions and balance between horizontal and domain-specific solutions.

A: BK Kalra stated innovation posture driving higher revenue cadence, need for data technology skills, and combination of horizontal and vertical domain-specific solutions.

Q: Sean Kennedy asked about Gen AI impact on trust and safety business.

A: BK Kalra mentioned content moderation is less than 10% of revenue, continued client intimacy, and AI can be used but large tech players have their own solutions.

Q: Brian Burke asked about progress in 2024 and focus in 2025, and bookings definition.

A: BK Kalra highlighted execution framework and innovation focus, Mike Weiner clarified booking definition change to industry standard and ACV trends.

Q: Surinder Thind asked about talent needs for technical skills and M&A.

A: BK Kalra discussed solutions firm approach, need for domain and function expertise, and disciplined M&A evaluation for organic capability gaps.

Q: Bradley Clark asked about funding of generative AI solutions.

A: BK Kalra said 2024 was more a shift of dollars than net new incremental spend, with clients experimenting in AI in 2024.